If you were a lover of reggae music in the 1970s, you would
certainly know “Time Hard”, a hit song by The Pioneers, the
Jamaican three-man band. “Every day,” they sang,
sonorously, “things are getting worse.” That song was
released in 1972. At the time, Nigeria was producing two
million barrels of crude oil per day and selling at an average
price of $1.8 per barrel.


We were not yet oil-dependent, so the revenue was basically
a bonus. By 1974, oil was selling for $11, six times the 1972
price, and our stomach ballooned. We became helplessly
hooked on petrodollars. The only song Nigerians could be
singing was: “Things are getting better.” The Pioneers would
not sell.


But their song still became very relevant in the early 1980s.
Average oil price fell from $34 in 1981 to $32 in 1982 and $
29 in 1983, meaning serious trouble. Oil boom had sent us
into an expenditure overdrive and overkill. We had taken on
massive projects, importing recklessly and accumulating
debts like medals. Our foreign reserves began to sink as we
struggled to import basic food items, such as rice and milk.
President Shehu Shagari tried to stay afloat through a
“stabilisation plan” that cut spending, reduced imports and
hiked duties. After the 1983 elections, the government could
no longer pretend. The economy went berserk. Things fell
apart.


This is 2016 and the symptoms persist. In fact, our economy
has been on a downward spiral since late 2014 when oil
prices started plunging. It became more pronounced in
2015, and it appears we are now breaking records as we
wake up every day. Are The Pioneers singing in the
background? The naira is officially at its worst since it
replaced the pound as national currency in 1973; oil
production has plunged from 2.2mbpd to probably its
lowest in 10 years; FX reserves are going south; inflation has
gone wild; and we are just awaiting figures from the
National Bureau of Statistics (NBS) to confirm that we’re
officially in a recession — first since 1987.


There are four points I would like to highlight as we discuss
the state of the nation this morning. One, we cannot deny
the fact that the crash in the price of crude oil is what got us
into our current gridlock. We classically got carried away by
the recent oil boom and failed to learn our lessons. Now
history is mercilessly repeating itself. Two, Buhari did not
inherit a healthy economy, contrary to whatever the critics
say.

Three, Buhari may not have been quick enough with his
response to the economic crises since he assumed office,
but there are no easy answers. Four, and this is the one that
scares me silly, we may be in for a prolonged drought.
Here we go. My first point. If Buhari inherited crude oil price
at $80 per barrel, with production levels remaining at over
2mbpd, the story would certainly be different.

We have to
face that fact without sentiments. The exchange rate, both
official and parallel, could still be below N200/$1; our
reserves would be still be fairly healthy because of the war
chest; and — with subsidy — petrol would still be less than
N100 per litre. Prices would stabilise. Foreign investors
would likely remain attracted to us and the stock market
would be bubbling. In other words, the relative growth we
have enjoyed over the years owed largely to high oil prices.
Indeed, President Goodluck Jonathan was unable to build
robust reserves in the time of boom — and this is very
significant. Under President Olusegun Obasanjo, the highest
price oil sold for was $60, and production was less than
2mbpd for the most part. He parted with $12 billion to settle
foreign debts, and still left FX reserves of $43 billion, out of
which $9 billion was excess crude savings. Under President
Umaru Musa Yar’Adua, oil went up and down, hitting $147
per barrel at some point, and sinking to $31 at its lowest.
With that, Yar’Adua raised FX reserves to $62 billion by
September 2008 — the highest in our history.



This is where the Jonathan team loses the argument. Oil sold
for between $70 and $120 during his first four years in
power (2010-2014) before the downward slide to $50 in
2015, when he left office. If our reserve management was
anything like what we had under Obasanjo and Yar’Adua
(when, by the way, Professor Chukwuma Soludo was the
CBN governor), Jonathan could have left at least $100 billion
in the reserves. If Buhari had inherited such a hefty kitty, the
naira would not be gasping for breath today. Clearly, our
failure to build an FX war chest in the time of plenty exposed
us to the infectious diseases we are battling with today.
Why couldn’t Jonathan build robust reserves? One, Dr. Ngozi
Okonjo-Iweala, former finance minister, kept crying that
Nigeria was bleeding from oil theft. Nobody listened. Over
400,000 barrels were being stolen daily. Two, NNPC failed to
remit billions of dollars to CBN coffers. The man formerly
known as Malam Sanusi Lamido Sanusi, then CBN governor,
raised the alarm. We didn’t listen. Three, governors opposed
crude oil savings, saying it is unconstitutional. Four, we
maintained an artificial value for the naira for long, insisting
we had “robust reserves”, but our appetite for imports was
more robust. We failed to curtail the appetite because we
were awash with dollars.
Our aggressive spending during the last oil boom is coming
back to bite us.


Instead of spending the oil wealth to deepen
and regenerate the economy, we ran amok, bloating the civil
service and turning political appointments to a sub-sector.
The governors were hiring jets every minute to attend
political meetings. Nigerians were buying jets like pure
water.


How many people were sending their children to
foreign schools in 1999 compared to, say, 2014? We believed
we had all the forex to buy the world. We totally savaged the
economy. This is not about Jonathan alone — it was a
national pastime: from councils and states to the colossal
federal government.

https://www.today.ng/opinion/157041/where-do-we-go-from-here

My third point.

Though Buhari did not inherit a wonderful
economy, his ideological hangovers prevented him from
acting on time to stem the tide. It’s like cancer. If you leave
cancer stage one untreated, it gets bigger, and moves to
stage two. Untreated, it gets worse and moves to stage three.


And, finally, it gets to stage four where it has spread to other
organs. The economy was probably at stage two when
Buhari took over, but he felt chemotherapy would be too
painful for the masses that elected him into office. Now the
cancer is spreading and killing jobs and shredding the naira
and shrinking the economy. That is the consequence of
delayed adjustment.


My fourth and final point. Since we are still hopelessly sold
to oil, and production is getting smaller by the day as a
result of militant activities, I think The Pioneers will have to
do a remix of “Time Hard”. Things will get even worse before
they get better. You don’t transit from oil economy to
industrial/service overnight. If we couldn’t do it in 40 years, I don’t expect us to do it in one year. Or even four years.


Except oil recovers miraculously, this carnage will continue.
Sadly, the bad situation is worsening because of socio-
political tensions: the herdsmen, the Niger Delta militants
and Biafra. Meanwhile, APC, the ruling party, is enmeshed in
a civil war.


Where do we go from here? I honestly pity President Buhari.


Despite shifting ideological grounds on the exchange rate
and fuel price, the economy is still nowhere near recovering.
The truth is that we are in a bad place and there are no easy
ways out. It is a peculiar mess. The tasks he must face
squarely now are critical.


One, how do we first stabilise the economy and stop this
bleeding? Two, where is the recovery roadmap so that the
average Nigerian can hope for light at the end of the
suffocating tunnel? Three, how do we ensure that if there is
another oil boom, we will utilise it intelligently and finally
escape from what I call the “petropathetic” syndrome?
It is very easy to point accusing fingers at Jonathan for
mismanaging the economy or Buhari for not finding a quick
fix, but maybe we should begin to look at the mirror as well.
With oil boom, we were living false lives, holidaying in Las
Vegas and holding weddings in Dubai with unearned or
dubiously earned income, pretending to be rich when it was
all a bubble. Now the bubble has burst. We can see clearly
now. As Buhari seeks to reform the economy, we too must
discipline our appetite and endure the inescapable pains of
adjustment. Without another oil boom, recovery is going to
be slow and painful. But in due season we shall reap — if we
faint not.


“It is very easy to point accusing fingers at Jonathan for
mismanaging the economy or Buhari for not finding a quick
fix, but maybe we should begin to look at the mirror as well.
With oil boom, we were living false lives”.

-----------------------------

DRUMS OF WAR.


The Oodua Peoples Congress (OPC) has issued an ultimatum
to Niger Delta militants to cease attacks on Yoruba
communities— failing which the brigandage will become “an
eye for an eye”. In recent times, suspected militants have
been unleashing havoc, unchecked, on coastal communities
in Lagos and Ogun states, shooting and looting, raiding and
raping, killing and kidnapping. The OPC threat,
unfortunately, is not the solution. The basic reason there is a
government is to provide security for lives and property,
and it will be tragic if people have to resort to self-help.
That’s a perfect recipe for civil war. Ominous.

----------------------

OUT OF ORDER.

Alhaji Ibrahim Idris, the acting inspector-general of police,
has ordered the arrest of the killers of Chief Lazarus Agaie,
the traditional ruler of Bokkos, Plateau state. Really? Do the
law enforcement agents need any order before they unravel
crime and apprehend the suspects? I thought that’s their
primary duty! When VIPs are kidnapped, we are usually
informed that the IG has “ordered” that the perpetrators be
arrested. This “order” business must be unique to Nigeria.
Should we assume that many murderers and kidnappers are
yet to be arrested because the IG has not “ordered” the
police to do so? Curious.

------------------

STUDENT AFFAIRS.


The National Association of Nigerian Students (NANS) has
done the unusual — they have finally spoken about a matter
concerning Nigerian students! They recently asked the
federal government to reverse the policy on post-UME tests.
I was very happy that for once, NANS is talking about
student issues. In the last 17 years, they have been busy
defending or promoting politicians. They have been
endorsing, dishing out awards to, passing votes of
confidence on politicians — and visiting state houses. Very
lucrative stuff. I totally forgot that it was an association set
up to fight for the interest of university students! Hilarious.

-------------------------

HIJAB SAGA.


Honestly, I never knew that Muslim pupils were not allowed
to wear hijab in public schools in some states until these
court cases started showing up. All my life, I have been
seeing female students wearing the hijab and “Deeper Life”
scarves, and I have never objected to it. Indeed, it looks so
normal to me. I’ve never lost my appetite or sleep because
of the way people choose to dress to express their faith.

-------------------------

Can
somebody please educate me on how hijab is a
catastrophe? I would like to implore all agitated parties to
allow sleeping dogs lie. Precarious.

Sensible post

Everyone are always blaming Jonathan on why he didn't save for the future.

To that question, I have few answers ;

1. If Jonathan was allowed to go ahead with removal of petrol subsidy, billions would have been saved but APC agents sponsored crowd and musicians to protest and nearly grounded the country

2. Jonathan created the Sovereign Wealth Fund to save for the future, APC governors spearheaded by Amaechi went to court for the money to be distributed so that they can use it for elections.

3. Jonathan proposed for 6 years single tenure to curtail election year expenditures, they said no.

The gentleman had to leave because Nigerians don't deserve a good leader.

I know many would come here with the lame argument that APC was not in existence then, God is judging all of you

Op u are wise.
permit me to follow u.

Horlufemi:
Sensible post

yomi007k:
Op u are wise.

permit me to follow u.

I appreciate u both..it really takes a deep-finkin person to take his/her time to read and digest this long but time-worthy piece and realize some truths we've allowed sentiments to rob us of, as Nigerians..
Common sense aint so common afterall.